An informed and thought-provoking analysis of what lies behind the headlines and headaches of business ethics and corporate social responsibility

Wednesday, June 6, 2012

The problem of virtual water

Today we have a guest blog from Jane-Fiona Cumming, A Director at Article 13, on the emerging corporate responsibility issue of 'virtual water'.

Is water the emerging big issue? It certainly should be, writes Jane-Fiona Cumming. Currently 25% of the world’s population is living in an area of water stress. The combined effects of population growth, increasing urbanisation, and the impact of climate change on upstream resources in areas across the globe will almost certainly ensure that the situation only gets worse.

And it is true that water is making its way up the sustainable development agenda. Millennium Development Goal Target 7.C calls for a commitment to ‘halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation’. Water is also one of the key issues for the UN’s upcoming Rio+20 conference.

Despite this, there remains a disconnect between attitudes and behaviours in water-rich areas and the problems in water-poor areas. (Although it should be said that a number of large multinationals whose operations straddle both types of region are taking their consolidated responsibilities seriously.)

One of the problems is that while there are parallels between carbon and water as sustainable development issues – the concept of water footprinting, for example, is gaining traction – there are significant differences. To put it bluntly, on a global scale, consuming less water in a ‘wet’ region does not add to the available resources in a ‘dry’ region.

However, while the big issues are on the agenda for debate, at Rio +20 for example, perhaps we should move our focus to what is called ‘virtual’ or ‘embedded’ water. Examples of moving virtual water abound. Just take the case of tomatoes exported from a water-poor area to retail shelves in a water-rich area.

One behaviour change that could create a unity of purpose, from individuals through to multi-national companies, is to be aware of where products come from and to make active choices about how we use or value embedded water products from water-poor regions. A type of ‘fair water’ trade, in which products that use embedded water have higher prices that help to make contributions to the local community in addressing water issues (including sanitation) could link the issues together.

What is certain is that, at every level, there is a need for real transparency and joined-up innovative thinking in our management of a finite, collective resource that every human life depends on. Initiatives may be hosepipe bans or the mending of leaking mains pipes; charity-based water products and promotions that divert funds to water projects in drought-susceptible areas, or commercial initiatives that reduce the need for industrial and agricultural water extraction; the movement of virtual water or supra-national mediation aimed at the avoidance of potential ‘water wars’.

This means that the link between changing attitudes and changing behaviours is not a straightforward one. Whether at an individual, organisational or governmental level, we need to be clear about what kind of behavioural change we want to effect. And that calls for some smart thinking, some honest debating and real transparency about the issue of embedded water.

2 comments:

Great thoughts. Factoring in consumption of "free" ressources in my buying-decissions.WHowever, what got me thinking as a consumer:I try to buy organic produce as much as I can. And try to source locally. In Europe it may be easier than in North America. With all the labels, like "Bio" according to EU-standards. Yes, I know, it's probably the lowest common denominator for sustainability. Now, how do I factor in how much water (or other "free" ressources") are consumed (wasted?) to ship produce/ products to my store? Okay, I try to stay away from Spanish tomatoes for the huge amoung of water consumed to grow them in a near desert-climate. I try to avoid cotton-products if they are not certified. And still most of the bio-/ eco-labels do not factor in the aspect of general ressource consumption.What is your CSR-take on it? How to expand the definition of "bio" or "sustainable" as to educate consumers?And secondly: if I avoid those products, do I harm the individuals working in those opperations, as they tend to be the poorest of the poor? (Not the owners of the plantations of course. The labourers.)I find this to be a catch-22.What is your CSR-take on it?

Good question regarding the problem of translating virtual water into consumer decisions. One way, as you mention, is through eco-labels. In the same way that you can now estimate the amount of carbon that goes into the production of a particular product, so too can you develop a system estimate the amount of water (and virtual water). That would address some of the transparency problems. However, there are still the trade offs with other social goods and bads that have to be reckoned with. Eco-labels are not a panacea, that is to be sure.

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Andrew Crane [L] and Dirk Matten [R]

Welcome to the Crane and Matten blog - for informed commentary and expert analysis on the everchanging world of corporate responsibility.

We are two business school professors best known for our books and research articles on business ethics and corporate citizenship. We wrote the Crane and Matten blog from 2008-2015, offering unique insight on a range of issues from across the globe.

Andrew Craneis Professor of Business and Society in the School of Management, University of Bath.

Dirk Matten is the Hewlett Packard Chair in Corporate Social Responsibility in the Schulich School of Business, York University.